# DLMS FINANCE PRC AGENDA ITEMS

**15–17 November 2011**

**0830 Start**

**2000 Corporate Ridge**

**Room : MCC #1 (2nd floor)**

**McLean, VA 22102**

**As of: 11/17/2011 10:06 AM**

**Defense Connect Online (DCO)**

Defense Connect Online (DCO) will be used to provide real-time viewing on your computer screen of the presentations for those participants who are dialing in to the meeting.  Access to DCO is through your web browser, and no special software is required.  The link is:  **https://connect.dco.dod.mil/sfis**

When you first connect, you will want to select the “guest” login option.  The only information required is your name.  This meeting has been setup as a “private meeting”, so after you click on the link below, you will be placed in a wait state until the presenter accepts your request. You will be granted the option of selecting “full screen” for viewing, which we recommend you select. If you have any problems, we can walk you through the process on the phone via the call in number. 

**SEQUENCE OF PRESENTATIONS.**To accommodate presenter schedules, we will begin on November 15, 2011 with new topics 10 thru 15.  Other topics currently have no set time. At the conclusion of our November 15, 2011 session, we will assess progress on the agenda and make a decision regarding the need for the November 17, 2011 session.

**OPENING REMARKS AND  WELCOME**

**DIRECTOR'S WELCOME**

**OPEN****ITEMS FROM FINANCE PRC MEETING OF NOVEMBER 17,  2010**

1. **Standard Financial Information Structure (SFIS).** Approved DLMS Change 435 has been issued. We will address implementation and related topics as new business.

2. **FAA RIC Problem.** Some FAA billings have RIC 570 vice RIC G69. Billie Davis, FAA, has indicated that FAA is sending RIC G69. This problem was originally surfaced by Air Force who implemented a temporary work-around pending correction.  Roxanne Degner, GSA, indicated that a programming change has been implemented to correct this issue.

3. **Air Force Billing Problems Resulting from Partial Shipments.** DLA Distribution Standard System (DSS) confirms based on partial shipments, and DLA Enterprise Business System (EBS) bills based on these confirmations (ARO), vice the material release order (A5_). The possibility exists that some bills will appear as duplicate billings. These bills don't contain suffixes on the document numbers. The Air Force finance system had considered the same document number with the same quantity to be a duplicate. Cliff Klein, USAF, indicated that a process change has been implemented. Is further action needed?

4. **GSA-Directed Shipments Lost at DLA-Operated Consolidation and Containerization Point (CCP)**. GSA directs vendor shipment to customers through the DLA CCPs.  If material is lost and GSA has transporter proof of delivery (TPD) from the vendor, neither the vendor nor GSA will reimburse the customer. DLA has no policy/process to provide credit for CCP losses based upon submission of a Supply Discrepancy Report (SDR) to DLA. GSA does not accept responsibility for CCP losses.  The volume of these types of lost items is small, but users get upset when they don’t get credit. Additional time is lost due to lack of published procedures governing this scenario, resulting in repeated follow-ups from the customer seeking resolution. Ellen Hilert (DoD Supply Discrepancy Report Sub-Committee Chair) initiated Draft PDC 314 to propose procedures for GSA to reimburse the customer and to then have DLA reimburse GSA. GSA would bill DLA for the customer’s credits. Ms. Hillert is working on DRAFT PDC 314.

5. **DAAS Bill Rejects:**

a. DLA reported that as of August 25, 2011, there were $3.5 million in rejected Interfund bills that failed DAAS DoDAAC edits.  This creates manual work for DLA and DFAS and delays bill processing. This represents unrealized revenue for DLA; delayed credits for Components and Agencies. Credits received after the expiration of the applicable appropriation may not be re-obligated. Resolving the process issues will further the goal of achieving clean financial audits. DLA is working aggressively to resolve the root causes. Components that are developing their ERPs may benefit from lessons learned.

b. ADC 354 provides information regarding DAAS edits on logistics bills and requisitions, including DoDAAC authority code edits implemented by ADC 262 that restrict designated DoDAACs from being used as requisitioning and/or bill-to DoDAACs. DAAS edits reject requisitions and bills in cases where the requisitioning DoDAAC or the bill-to DoDAAC is not a valid DoDAAC. DAAS edit rejects occur either because these DoDAACs are not active DoDAACs on the DLA Transaction Services authoritative database or do not have the correct authority code for these transactions. 

c. Rejected Interfund Bills FPRC Chair Briefing - Bob Hammond

d. DLA Updates 

i. August 2011 listing of DLA rejected bills

1) DLA Briefing - Cathy Shepard 

2) Identify root causes of recurring problem. Check to see if DLA is employing the DLA Transaction Services DoDAAD replicated database, including the DoDAAC authority code, to screen Defense Medical Logistics Standard System (DMLSS), Subsistence Total Order and Receipt Electronic System (STORES), Tailored Vendor Relationship (TVR) and Call Center transactions. 

ii. Discussion of contractor DoDAACs that cite a DFAS activity in the DoDAAC TAC 3, which may be a practice employed by Army and others. DLA to provide examples (if any) and indicate if this is a current problem.

e. Other Component/Agency issues with rejected bills, including GSA process for rejected bills - All

i. September 1, 2011 All Component Listing of rejected bills

.

6. **Non-Interfund Billing (XP Fund Code**).

a. DoD Financial Management Regulation DoD 7000.14-R, Volume 4, Chapter 3 Receivables, Paragraph 030504.B states that “Bills arising from transactions which contain a National Stock Number within the DoD will be collected through the Military Standard Billing System (MILBILLS) Interfund billing procedures when supported by the supply and accounting systems. The provider will not accept a MIPR if Interfund can be used. Manual billing (i.e., the XP fund code) will not be used unless approved by the Deputy Chief Financial Officer.” Non-Interfund transactions increase processing costs and processing time. In addition, they are a significant source of delinquent receivables. DLA acknowledges that price adjustment issues for STORES requisitions have resulted in Components using non-Interfund transactions. DLA is working to correct those price adjustment issues. DLA has held meetings with Military Services and DFAS client executives to reduce the use of non-Interfund requisitions. 

b. Updates needed:

i. Status of STORES price adjustment progress - Michael Lane, DLA

ii. Coordination to reduce non-Interfund requisitions - Michael Lane, DLA

iii. Air Force ADC 110 edits for non-Interfund requisitioning.- USAF

iv. Component/Agency known uses of non-Interfund requisitioning that may be potentially converted to Interfund - All

v. Non-Interfund DoDAAC Authority Code - Angel Sweetser, DFAS

7. **DLMS Manuals.** Draft DoDI 4140.01, which is pending signature, designates the publication of MILS/DLMS manuals as Defense Logistics Manuals (DLMs). This would include MILSBILLS (DoD 4000.25-7-M) and the DLMS Manual (DoD 4000.25-M), which both contain financial procedures for the DoD logistics infrastructure. In addition, Bob Hammond is working to update and combine the procedures from the DLMS Manual (DoD 4000.25-M) and MILSBILLS (DoD 4000.25-7-M) into a single manual and to address inconsistencies between the manuals and achieve administrative efficiency. The ultimate goal is to incorporate all procedures into DLM 4000.25-M, Volume 4 - Finance. Proposed DLMS Changes (PDCs) covering all chapters have been issued. PDCs will be discussed as new business. One FPRC meeting goal is to resolve PDC comments to support prompt issuing of an Approved DLMS Change. 

8. **Interagency Agreement (IAA).**The Interagency Agreement is proposed by Treasury and the Office of Management and Budget (OMB) to be the new standard agreement form for capturing the detailed information required for processing reimbursable and assisted acquisition agreements with the goals of providing consistent, uniform information and financial facilitating eliminations. Treasury will provide a briefing as new business.

9. **MILSBILLS – Credit Adjustment Process.**

a. Joshua Doroen (DFAS) provided a briefing on an ongoing Lean 6 Sigma effort between DFAS and DLA to improve the process for resolving “disputed” transactions. It was determined that DLA Enterprise Business System (EBS) is non-compliant with MILS and DLMS in not having fully implemented the financial transactions for billing adjustment requests and replies, (MILS FAE/FAR and DLMS 812R/812L). This is resulting in a labor-intensive email process, causing delays in processing adjustments. 

b. Updates:

i. Status of Systems Change Request BFI-11-38 to resolve this problem - Michael Lane, DLA

ii. DFAS initiative - Joshua Doroen, DFAS 

iii. Determine if “Interim” guidance is needed pending the EBS systems change - Michael Lane, DLA

**NEW ITEMS.**

10. **Eliminations Problem -**A****Treasury briefing to the FPRC is planned for next calendar year. This is a material weakness for the Department of Defense preventing clean financial audits.

11. **Treasury Interagency Agreement (IAA) - Paul Lionkis, Treasury**

a. Treasury Briefing

b. DoD Pilots of Draft Revised IAA

c. IAA Forms and Instructions

i. Order2 - IAA Final Draft

ii. GTC - IAA Final Draft

iii. Instructions****

d. This topic was briefed at the November 17 2011 FPRC. Briefings may be found at******http://www2.dla.mil/j-6/dlmso/Archives/archives_fin.asp****.**

e. Robin Gilliam, Department of Treasury Financial Management Service (FMS) Government-Wide Accounting (GWA) Systems and Standards Integrator,

is working closely with the Department of Defense in a very cooperative relationship toward piloting the IAA**.**With respect to Interfund and other potential uses, Robin provided the following guidance:

i. I want to clarify to all that agencies need to understand their "inventory" of reimbursable agreements (transaction types) to determine which ones would fit best with the IAA.   At this time, the IntraGov business rules (TFM Vol 1, Part 2, Section 4700, Appendix 10) state in section 4 that: “Federal entities should use the recommended standard IAA (see the FMS Web site at http://www.fms.treas.gov/finstandard/reference.html) for most reimbursable transactions between trading partners.”

ii. The recommended standard IAA is not the solution for all intergovernmental activity such as high-volume, low-dollar type transactions between agencies. It is intended to standardize and facilitate the exchange of data among intragovernmental trading partners for contractual type transactions.

iii. FMS can guide you on what is a good fit in relationship to reimbursable agreements, but, while FMS can guide you in where to use the IAA,  agencies need to make the final decision based on their understanding of the transaction types involved.

12. **Government-Wide Accounting Initiative:**Meetings with key Treasury, DFAS, Federal Agency, OSD(C) DoD Deputy Chief Management Officer (DCMO) and Logistics Management Standards personnel to assess the applicability and impacts to logistics processes and systems, including Interfund billing are ongoing. Current status will be discussed, including the Treasury Commissioner Memorandum, which addresses Payment Application Modernization and TAS/BETC.

a. Briefing -  Michael Norman, Treasury

b. DoD Overview - Tracy Jackson, DFAS Enterprise Solutions GWA/GTAS Project Office 

c. November 8, 2011 Meeting Minutes with relevant attachments

13. **Standard Financial Information Structure ADC 435 Implementation**

a. Overview - Bob Hammond, Logistics Management Standards

i. Briefing

ii. ADC 435

b. SFIS  Fund Code Conversion Table development - DLA Transaction Services

c. Fund Code Monitor purging of unused fund codes - All

d. Federal Agency BPNs - GSA

e. Additional SFIS material (including past FPRC meeting minutes) may be found on the FPRC Website at **http://www2.dla.mil/j-6/dlmso/Archives/archives_fin.asp****.**

14. **Standard Financial Information Structure****- Ray Bombac, DCMO .**Potential topics include future SFIS requirements, SFIS Governance Board and SFIS compliance. Components and Agencies should come prepared with questions.

15. **Federal Agency Billing Systems - GSA, FAA, NOAA**

a. GSA is modernizing its billing system, which currently supports GSA, FAA and NOAA

b. FAA is planning to become a Central Accounts Office to support FAA and potentially NOAA billing. FAA is considering using IPAC to support DoD customers. What are potential impacts?

16. **DLA Energy Convergence Initiatives, Including Aerospace Interfund Billing – DLA**

a. Energy Convergence Briefing - William Comar, DLA

b. DLA Customer advisory letter

17. **Bills Without Fund Codes - All**

a. Components and Agencies should be prepared to address root causes.  Source of Supply are accepting orders without Fund Codes.

18. **Combining DLMS/MILSBILLS Manuals.**

a. **Publications Briefing****- CPT John Burnett, Logistics Management Standards**

b. **PDC 488**

i. **ADC 294**

ii. **Department of Treasury Suspense Waivers****- Stephanie Olson**

c. **PDC 490**

d. **PDC 491**

e. **PDC 493**

f. **Summary of PDC Comments**

19. **DLMS 810L, 812R, and 812L ERP Implementation.**Status updates requested from All.

20. **DLMS Migration Status****- Dale Yeakel.**DLA Logistics Management Standards will provide a status update on migration from fixed 80 record position MILS transactions to variable length Defense Logistics Management System (DLMS) transactions.

21. **Finance Training.**

a. DLA Logistics Management Standards Office will present training on DLMS Finance:

i. Module 4F - DLMS Finance Training

ii. DLMS Supplement 810L

22. **DLA Logistics Management Standards Office Website.**Bob Hammond will provide a demonstration of the information available from the DLA Logistics Management Standards Office Website at http://www.dla.mil/j-6/dlmso/eLibrary/Changes/approved4.asp. Some examples of key information include: links to DLMS Committee information (including FPRC), Logistics Management Standards Committee representatives (such as FPRC and Fund Code), DLMS Changes (Proposed and Approved), and DLMS Supplements.

23. **Process Review Committee (PRC) Survey.**

a. DLA Logistics Management Standards Office appreciates your feedback on this PRC, and welcomes any comments for improvement. Hard copy surveys will be handed out at the PRC. DCO participants may download the survey and email it to**robert.hammond@dla.mil**

b. Download Survey

c. Thank you for your participation in the Finance Process Review Committee meeting.

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